PLSA launches guide on new trustee investment disclosure duties

The PLSA has today published guidance to help DB and DC trustees navigate the new requirements to publicly disclose their investment and responsible investment activity over the previous year in an “Implementation Statement”.

The new duties from the Department for Work and Pensions (DWP) require trustees to disclose how and to what extent their investment action over the course of the previous year follows the investment intent, as set out in the scheme’s Statement of Investment Principles (SIP). 

The requirements differ for trustees of DC/hybrid and DB-only schemes, with DC/hybrid schemes required to disclose against all parts of their SIP and DB-only schemes required only to disclose on their voting and engagement behaviour.

The PLSA’s guidance offers practical, step-by-step support for trustees to produce meaningful and relevant disclosures. 

This guidance builds upon the PLSA’s popular 2019 guide for trustees on ESG and stewardship although its scope is broader, covering the full investment implementation aspects of these new Statements. It sets out:

• What the legislation requires and by when;
• Both general principles and more detailed possible considerations for trustees to produce good statements;
• The specific considerations around voting behaviour disclosures; and
• ‘Top tips’ for investment and responsible investment communications.

The guidance was produced by the PLSA’s Voting and Implementation Statement Working Group (VISWG), a cross-industry group of experts, as well as by a Stakeholder Group comprised of representatives from government, regulators and industry organisations.

Laura Myers, PLSA Working Group Chair and Policy Board member, said: “The recent changes to the Occupational Pension Scheme (Investment) Regulations 2005 have put the onus on schemes to not only provide more details around how ESG considerations impact their investment decisions, but also to improve trustees’ investment decision making and governance more generally.” 

“These new regulations require schemes to publish a SIP which sets out how trustees make strategic investment decisions and produce an annual implementation statement to illustrate how these strategic aims have been enacted in practice.”

Caroline Escott, Senior Policy Lead: Investment and Stewardship, said: “The implementation statements are a very new discipline for trustees, and will require them to carefully consider which investment decisions and activities have or will have the greatest impact on their investment objectives.

“We believe that well-crafted, relevant and interesting disclosures will add real value to beneficiaries in understanding their scheme’s investment approach, including their approach to ESG and stewardship issues. With policymakers and the public increasingly interested in how schemes invest, we hope that our guidance will provide a useful starting point for trustees and support them in communicating how they invest to protect and enhance the value of individuals’ retirement savings.”

The full guide can be downloaded here.

Mark Smith, Senior PR Manager
 020 7601 1726 |  [email protected]k

Steven Kennedy, PR Manager
 020 7601 1737 | 07713 073024 | [email protected]